Even giants fall, and once-great companies who were once at the top of their games can find themselves behind the eight ball as innovation takes hold and newer, better competitors start to emerge. This is particularly true in the retail industry, where one-time stalwarts in a variety of retail categories can suddenly find they’ve become “old news,” upended and replaced due to technology, an inability to adapt, and rapidly changing market conditions.
The year 2017 was a rough one for the retail space in terms of high-profile bankruptcies. Well-known brand names were forced to seek refuge behind bankruptcy as their once-solid business models started to give way. We’ve collected ten such examples from last year, and while not all of these companies are gone completely, the standing they once had in their respective categories may never recover.
Here they are.
Many of us grew up wanting to be Toys “R” Us kids, and there’s no doubting the company’s influence over several decades in the area of toy sales. But being a specialty store — even one as big as Toys “R” Us — comes at a price in a world where online retailers and big box stores can carry everything your heart desires.
With its bankruptcy filing last year, Toys “R” Us hopes that a company free of debt can reemerge and recapture its position as the number one seller of toys.
As the ultimate niche store for lovers of electronics, the demise of RadioShack hit a lot of people right in the heart. The company’s history can be traced back to many wonderful memories for those who grew up tinkering with ham radios and diodes, but the Internet and ever-decreasing store sales ultimately forced RadioShack to close 200 stores with no clear path forward on what the rest will become.
It would be a shame to lose this almost 100-year-old company to the history books, but that’s business.
As someone who worked in a now-defunct Circuit City, I watched with curiosity as HHGregg gobbled up that store’s retail locations and opened its doors offering almost the exact same experience. As it turns out, it may not have been Circuit City’s fault it died out, but rather, the fault of the times.
Best Buy became the de-facto big box store for pretty much anyone who wanted to shop for electronics and appliances at a brick-and-mortar, and websites like Amazon only exacerbated the squeeze. HHGregg never really had a chance, and last year, the company filed for bankruptcy and liquidated its assets shortly thereafter.
Payless is a sort of cultural icon in a way not many people expected it to be. Everyone can remember living near a Payless, and from its founding in 1956 until its bankruptcy filing last year, the company set out to do one thing: sell shoes at inexpensive prices.
It largely succeeded in that regard, but the shifting retail landscape meant that people could shop for a larger selection of cheap footwear online at any time. Payless closed 800 of its 4,400 stores after its filing last year, and more closings could be in the pipeline if things don’t pick up.
We’ve already talked a little bit about specialty stores and how that approach to retail has wound up hurting once-large companies, and Gander Mountain is no exception here. When the Internet came into the picture, the room for multiple brick-and-mortars serving the same audience shrunk significantly, and with big players like Dick’s and Cabela’s already eating up the lion’s share of business, Gander Mountain couldn’t keep up.
It filed for bankruptcy last year, closed 30 of its retail locations, and auctioned itself off to Camping World Holdings.
If you’ve ever had a child, or shopped for a child, chances are you’ve been to a Gymboree. These shops were, at one time, the mecca of all things baby and toddler — a place you could go to pick up some clothes for those hard-to-shop-for little ones as well as some other goods.
The company’s downfall wasn’t necessarily the advent of online retail, but rather, the enormous amount of loans the company took out that it wasn’t in a position to pay back. After filing bankruptcy last year, Gymboree closed 450 retail locations and put together a plan to reduce its debt further. Time will tell on this one.
Boss lady shoppers all knew The Limited was the place to be when it came to shopping for fashion. But time and increased competition in the retail space ultimately left this female-focused retail shop to experience troubles, as online stores and larger department locations offered the same items alongside a wider selection of styles.
The Limited ultimately filed for bankruptcy at the start of last year and closed all 250 of its remaining retail stores. At this point, all that remains is the intellectual property and a chance for its buyer, Sycamore Partners, to try and start anew.
Let’s try something: I’ll ask you where you’d go if you wanted to buy vitamins and other supplements. You answered GNC, right? That’s what wound up being the problem for Vitamin World, a competing retailer that couldn’t keep up with the bigger name in health and the onrush of online stores willing to sell the same items at better prices.
After entering bankruptcy jin 2017, Vitamin World closed some 45 of its more disappointing retail locations and started looking at ways to renegotiate its rent for its remaining stores.
Teens about a decade and a half back thought Rue21 was all the rage when it came to the apparel and accessories they were after. But with its locations mostly in malls and online shopping taking foot traffic away from those shopping centers, it was only a matter of time before Rue21 suffered as a result.
Sales declined, and the company was forced to file for bankruptcy and close 400 of its 1,200 stores.
Another teen retailer falling victim to bankruptcy this year was Wet Seal, once thought of as a hip, trendy spot for teens who thought themselves the most fashionable. Unlike Rue21, however, Wet Seal had been struggling mightily for quite a while, seeming to evade bankruptcy like Rocky dodging punches — staggered, looking ready to drop at any moment, but still somehow summoning the energy to remain standing.
The fight came to an end last year, as Wet Seal defaulted on $27 million in bank-owned notes, entered bankruptcy, and got bought out by Versa, a private equity firm.